Overview
- Chief economist Huw Pill said further reductions are likely over the next year but warned against cutting borrowing costs too far or too fast.
- Forecasts point to UK CPI at about 4% in September, the highest since January 2024, reinforcing concerns over services and wage-driven inflation.
- The Bank Rate stands at 4% after multiple cuts from 5.25% since last year, with Pill previously dissenting against the August 2024 reduction.
- Investors now price only a low chance of a November move, with many expecting the next meaningful easing to slip into early 2026.
- The early-November MPC decision comes three weeks before Chancellor Rachel Reeves’s 26 November Budget, with the IMF projecting the UK to have the highest G7 inflation this year and next.